Ease of Doing Business in India

Imagine you want to start a small manufacturing unit. You will start working by answering questions like, how long will it take to get a permit from local authorities, how will I register my business, from where can I get the land to set up, how much will the land cost, what tax waivers are available, what is the process to get water and electricity and so on.

This is where the concept of Ease of Doing Business (EODB) becomes important. As the term suggests, EODB implies how easy or difficult it is for a business to start, operate and grow in any particular region. It was first coined by the World Bank, where it measured Ease of Doing Business on certain pre-defined parameters and released country-based reports.

India improved from 142nd position in Doing Business 2015 to 63rd position in Ease of Doing Business 2020, gaining 79 places in five years. Although the report was discontinued in 2020, the concept remained popular and to date is referred to widely by policymakers (both central and state), investors and analysts. Even without a formal scoring anchor, this term is used to loosely indicate how friendly the business environment is and how laws and rules for businesses are.

In this article, we explain what all goes in Ease of Doing Business, India's past ranks, key reforms, regulatory bodies involved and the latest developments.

What is Ease of Doing Business?

Ease of Doing Business refers to how easy it is for businesses to start, operate and expand in a country. The assessment considered several aspects, including,

• Starting a business
• Obtaining construction permits
• Getting electricity connections
• Registering property
• Access to credit
• Protection of investors
• Payment of taxes
• Cross-border trade
• Contract enforcement
• Insolvency resolution

Countries with efficient systems and fewer regulatory hurdles generally ranked higher.

Why is Ease of Doing Business Important?

A supportive business environment benefits entrepreneurs, business personnel, investors, consumers and the economy as a whole. Its major benefits include,

Encourages Entrepreneurship - When registration procedures and compliance requirements are simple, more people are willing to start businesses and pursue entrepreneurship. This helps to boost the overall economy’s output.

Attracts Investment - Every investor, be it Indian or foreign, will prefer countries where regulations are transparent and approvals are quick. Friendlier policies attract more investors.

Creates Employment - New businesses generate jobs. This job creation contributes towards the financial well-being of employed and dependants and it boosts the overall economic development.

Promotes Economic Growth - A business-friendly ecosystem usually fosters economic growth. Here, companies can expand operations, increase production, thereby contributing to national output.

Improves Global Competitiveness - Multinational companies and global investors prefer to operate in countries where ease of doing business is higher.

Ease of Doing Business India Rank

India made remarkable progress in improving its business environment. According to the World Bank's Doing Business 2020 report, India ranked 63rd among 190 economies. This represented a remarkable improvement from its rank of 142 in 2014.

The improvement was a result of reforms in areas such as business registration, taxation, insolvency resolution and digital governance. Many people continue to search for terms such as “Ease of Doing Business India Rank 2024”, “Ease of Doing Business India Rank 2022” and “Ease of Doing Business India Rank 2021”. However, it is important to note that the World Bank discontinued the Ease of Doing Business report in 2021 due to concerns regarding data irregularities.

As a result, there are no official World Bank Ease of Doing Business rankings after the 2020 report. Source: World Bank Doing Business 2020 Report.

Also Read - What is Difference Between GDP and GNP

Ease of Doing Business in India: Key Statistics

India's business ecosystem has expanded significantly over the years.

Some notable figures include, India's last official Ease of Doing Business rank: 63 out of 190 economies

• Improvement in rank between 2014 and 2020: From 142 to 63
• DPIIT-recognised startups in India: More than 2.23 lakh
• Direct jobs created by recognised startups: Over 23.36 lakh
• Startup India initiative coverage: All States and Union Territories These numbers highlight India's growing entrepreneurial ecosystem and its efforts to simplify business operations. Source: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.

Important Regulatory Bodies Involved in Ease of Doing Business

Improving Ease of Doing Business requires coordination between multiple ministries and regulators.

Department for Promotion of Industry and Internal Trade (DPIIT) - DPIIT is the primary government body responsible for coordinating Ease of Doing Business reforms in India. It also oversees Startup India and various business reform initiatives.

Ministry of Corporate Affairs (MCA) - The MCA regulates company incorporation, corporate governance and compliance under the Companies Act. Online company registration systems have significantly reduced processing times. ** Central Board of Direct Taxes (CBDT)** - CBDT administers income tax and other direct taxes. Simplification of tax filing processes helps improve the business environment.

Central Board of Indirect Taxes and Customs (CBIC) - CBIC manages GST and customs administration. The implementation of GST helped simplify India's indirect tax structure.

Reserve Bank of India (RBI) - The RBI regulates the banking system and ensures financial stability. Access to credit is an important component of a healthy business ecosystem.

Securities and Exchange Board of India (SEBI) - SEBI regulates India's capital markets and protects investor interests. It plays a key role in enabling companies to raise capital.

Insolvency and Bankruptcy Board of India (IBBI) - IBBI oversees the Insolvency and Bankruptcy Code (IBC), which helps resolve business insolvencies through a structured legal framework.

State Governments - State governments are responsible for land approvals, labour registrations, environmental clearances, electricity connections and local business permits.

Also Read - What is Difference Between Fical Deficit, Trade Deficit and Current Account Deficit?

Major Reforms That Improved Ease of Doing Business

Digitalisation of Government Services - Many government processes are now available online. This reduced cumbersome paperwork and improved efficiency.

Goods and Services Tax (GST) - The introduction of GST replaced multiple indirect taxes with a unified tax framework. This simplified compliance for businesses.

Insolvency and Bankruptcy Code (IBC) - The IBC introduced a time-bound process for resolving insolvency and improving credit practices.

Faster Company Registration - Online incorporation systems have reduced the time and effort required to start a business.

Labour Law Reforms - The consolidation of labour laws aims to simplify compliance requirements for employers.

Single-Window Clearance Systems - Several states have introduced single-window systems. These act as one-stop shop for businesses to obtain approvals quickly and seamlessly.

Challenges That Still Exist

Despite significant improvements, certain challenges remain.

Contract Enforcement-Legal disputes can take considerable time to resolve, increasing costs for businesses.

Regulatory Complexity-Different rules across states can sometimes create compliance challenges.

Land Acquisition-Obtaining land for industrial and infrastructure projects is still difficult in some regions.

Compliance Burden for Small Businesses-Smaller enterprises may still find regulatory requirements time-consuming and expensive.

Addressing these issues could further enhance India's business environment.

What is BRAP?

India's domestic counterpart to the Ease of Doing Business framework is the Business Reforms Action Plan (BRAP), launched by DPIIT in 2014. BRAP evaluates states and Union Territories on business-friendly reforms and has become a key tool for promoting competitive federalism and improving the investment climate.

The Future of Ease of Doing Business in India

India continues to focus on improving its investment climate through initiatives such as,

• Startup India
• Digital India
• Make in India
• Production Linked Incentive (PLI) Schemes
• Digital public infrastructure development

As technology adoption increases and government processes become more streamlined, India is expected to remain one of the world's most attractive destinations for entrepreneurs and investors.

Frequently Asked Questions (FAQs)

What is Ease of Doing Business?

Ease of Doing Business refers to how easy it is for businesses to start, operate and expand within a country based on regulatory and administrative factors.

What was India's last Ease of Doing Business rank?

India ranked 63rd out of 190 economies in the World Bank's Doing Business 2020 report.

What is the Ease of Doing Business India Rank 2024?

There is no official Ease of Doing Business rank for 2024 because the World Bank discontinued the rankings in 2021.

Which government agency handles Ease of Doing Business reforms in India?

The Department for Promotion of Industry and Internal Trade (DPIIT) is the primary agency responsible for coordinating Ease of Doing Business reforms.

Why is Ease of Doing Business important?

A better business environment attracts investment, promotes entrepreneurship, creates jobs and supports economic growth.

How did India improve its Ease of Doing Business performance?

India improved company registration systems, introduced GST, implemented the Insolvency and Bankruptcy Code, expanded digital governance and simplified various regulatory procedures.

How many recognised startups are there in India?

India has more than 2.23 lakh DPIIT-recognised startups as of March 2026.

Why did the World Bank discontinue the Ease of Doing Business report?

The World Bank discontinued the report after identifying data irregularities in previous editions and decided to develop alternative approaches to measuring business environments.